Section one provides an economic updateand assesses the challenges and near-term prospects facingthe South African economy. In particular, it looks at theimplications for South Africa of the resurgence ofuncertainty in global financial markets, the surge incapital flows to safe-haven assets, the continuing Euro zonecrisis, and signs of slowdown in some of the large emergingmarket economies. Section two focuses on inequality ofopportunity in South Africa. For the first time, usinginnovative techniques, this section presents an analysis ofthe interlinked inequality of opportunities for children andfor access to employment. Every society has a degree ofinequality of outcomes that reflects differences in innatehuman capabilities, effort, education, experience, andskills. But a recognized goal for public policy is to ensureat least the equality of opportunity for every individual ina country. Many countries have used this new approach todevelop targeted policies to promote such equality ofopportunity and to monitor and evaluate the success ofpublic programs.